Despite Vongroup's Pullback, Insiders Still Gained HK$279k

Insiders who bought Vongroup Limited (HKG:318) in the last 12 months may probably not pay attention to the stock's recent 10.0% drop. After taking the recent loss into consideration, the HK$2.42m worth of stock they bought is now worth HK$2.70m, indicating that their investment yielded a positive return.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Vongroup

The Last 12 Months Of Insider Transactions At Vongroup

In the last twelve months, the biggest single purchase by an insider was when CEO & Chairman Tat Ieong Vong bought HK$409k worth of shares at a price of HK$0.27 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of HK$0.32. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Tat Ieong Vong bought a total of 8.57m shares over the year at an average price of HK$0.28. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Vongroup Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Vongroup insiders own about HK$56m worth of shares (which is 65% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Vongroup Tell Us?

The fact that there have been no Vongroup insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Vongroup insiders think the business has merit. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 4 warning signs for Vongroup (of which 1 is significant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com